A simple question with profound implications
Where is value being created, and destroyed?
What better question do bold leaders, passionate about innovation, need to ask, and answer?
Think about it.
Today’s leaders know innovation is key to sustainable success. Yet many large organizations struggle to stay relevant in an agile, networked, entrepreneurial world. For these organizations, the failure to innovate creates fundamental barriers to growth and can even threaten the firm’s ongoing competitive or social relevance. For many, businesses are optimized for a world that no longer exists, with blunt implications on:
- what they offer
- how they do so
- the capabilities underpinning what they do, and
- how they engage in the market – with their customers, their suppliers, their partners, their stakeholders.
Historically, and across all industries, barriers and constraints – whether internal capabilities or market friction – have been signposts to new opportunities, to explosive sources of growth based on insights into where value is being created, and destroyed and new capabilities to capture the resulting opportunities. It’s no different now – hence the opportunity. From this perspective, innovation becomes a pragmatic activity with a clear mission as well as an equally pragmatic way both to talk and to take action with speed and scale.
- Its mission: to provide insight into where value is being created, and destroyed, with pragmatic steps to capture the emerging opportunities such insight affords.
- Its definition: a set of activities, and competencies – know-how, skill-sets and assets – that overcomes (organizational & market) constraints in service to meeting emerging sources of opportunity and need, as measured by creating both greater societal benefit & economic value.
- And, therefore, the bold leader imperative: to catalyze a culture of insight and deepen the foundation of innovation competencies to capture distinctive, and sustainable, sources of value.
Just as Nike re-wired our thinking such that every person could become an athlete, by “just doing it,” so too can every organization become innovative, by “just ‘re-wiring’ what they do and how they do it – in service to identifying and capturing new sources of distinctive & material value.”
Otherwise, why do it?
What we believe – based on insights and experience, globally – from the Middle East to Africa, North America to Europe, South Korea to China.
We believe that:
1. Many businesses are in transition, whereby “the same old, same old” no longer works.
As a proof point, merely think about who the Industry leaders are today, versus 5 years ago. Who will be the new set of industry leaders in 5 years? Over 30% of once Industry leader leaders “topple” within 5 years and interestingly, only 5% have “superior” economic performance more than 10 years. Think merely of the extraordinary technology innovations and their implications that have always and will continue to outpace ‘managerial’ or organizational innovations by 5 – 7 years – such as it has always been, and will always be.
2. Bold leaders need to change their strategic questions from (the typical) questions of:
- How do we grow our revenue, and profitability base?
- Where do we cut costs, materially?, and
- How do we shape the market to our value proposition – through engaging with our customers differently?
- Where is value being created, and destroyed
- How do we capture it, profitably (or for a public organization, with measurable societal benefit) and
- How do sustain it, with speed and scale, by ‘nudging’ our ecosystem towards greater societal benefit & economic value?
This shift in *what* the strategic questions are has profound implications on decisions made and actions taken. Asking the second set first, makes answering the first set a second priority, and so, so much easier.
3. That many organizations are optimized for a world that no longer exists with blunt implications on:
- What we call the “new 20%” – of capabilities, know-how and technologies that will drive 70% of your value tomorrow, compared to the 20% that drive it today.
- How you (co-)design your products and services
- How you engage your customers, your partners and equally critically, the “white space” of disruption, and opportunities, that we all face.
- How you ‘amplify the faint signals’ of customer needs and technology shifts – signposts of emergent opportunities.
4. Figuring out how to motivate individual action for collective benefit is critical – whether around a specific innovation challenge, an innovation journey around a specific market opportunity, or a full-blown transformation program. We all know that ‘starting’ / piloting something new is hard. How do you do so, while mitigating the risk of change is always a significant opportunity – if taken as that, an opportunity to clarify:
a. How impact and value will be measured – via some form of ‘shared value framework’
b. What it means to different stakeholders involved in the journey – answering the ‘why need I care’ question
So, when do you start?
Now, because opportunities for engaging with your market, your customers, your stakeholders in new ways – in a way that creates both greater economic value, and societal value… are all around you. They, to paraphrase the novelist William Gibson, are just unevenly distributed.